JDC cutting staff, eyeing aid reduction

NEW YORK (JTA) – The American Jewish Joint Distribution Committee is cutting programming and is laying off 60 staffers in its overseas and New York offices, its executive vice president told JTA.

The JDC said it already has had to cut aid to 25,000 people in the former Soviet Union and would need to eliminate some programs, but declined to say which ones.

Executive Vice President Steven Schwager in a telephone interview Monday said the organization will cut eight staffers in New York and 52 in Israel and other countries.

Schwager said the cuts, which have been discussed internally for three months, became necessary because the falling dollar has left the organization with an estimated $60 million budget shortfall.

“Between the weak dollar and inflation, we have lost about 20 percent of the purchasing power of our money around the world and we have started to make serious programmatic cuts to get back to our program budget,” he said.

“We also looked at our world staff and senior staff and are in the process yesterday, today and tomorrow of notifying around 60 people around the world in New York, Jerusalem, the FSU, Europe and Latin America that we are making a staff reduction.”

That 20 percent translates into a $60 million shortfall, Schwager said.

The cuts come as nonprofits around the world feel the hit of the falling dollar and the economic slowdown in the United States. Both have created a greater need for dollars from nonprofits that raise money here and do their work abroad, and forced many donors to tighten their philanthropic wallets.

The JDC, which with the Jewish Agency for Israel is the overseas partner of the North American Jewish federation system, became concerned at the beginning of the year when the dollar started its drastic drop.

In response, the JDC instituted a hiring freeze in March to try to stave off staff reductions. But Schwager said the cuts became a reality in recent weeks when it became clear that the organization would not quickly be able to find donors to make up the shortfall.

“The simple math of the thing is that if you take an Israeli employee that we pay 300,000 shekels, last year that cost us $71,000 per year. This year that employee working the same hours at the same salary cost us $90,000,” he said. “We can’t afford that.”

Jewish Agency officials have not yet announced whether they are contemplating programmatic and staff cuts, but the budget will be the main topic of discussion when the organization holds its Board of Governors meetings June 22-24 in Jerusalem.

The JDC receives $87 million of its $325 million from a set pool of money the United Jewish Communities collects from local Jewish federations in North America. For the rest, a third each comes from individual donors, private foundations, and combined from Holocaust reparations and the Israeli government.

The organization will reach out to its donors in a bid to make up its budget deficit, Schwager said. The JDC last week secured a 16 percent to 18 percent increase in the funding it receives from the Combined Jewish Philanthropies of Greater Boston and will reach out to more federations in the coming months.

The JDC, which has some 825 employees worldwide, will save about $4 million in salary with the 60 layoffs. Most involve positions that are paid for with core budget money, as opposed to funds used for temporary, elective programming.

Most of those let go are from JDC’s Israel office, which employs two-thirds of the organization’s global work force.

They range from “secretary to just below regional director,” Schwager said. “The highest level was country director.”

The laid-off employees will be given two months’ notice and a severance package.

“This is not what I signed on for at JDC,” Schwager said. “I signed on to help people. To fire staff is not a pleasant activity.”